One of the most expensive places in the U.S. to buy a house is in Los Altos California, where homes averaged $1.7 million in 2012. With no money down, a 30-year mortgage at 5% on a home in Los Altos costing $1.7 million would cost you $131,000 a year (almost $11,000 a month for a mortgage payment).
That is less than half your annual income if you earned $250,000 a year; so you'd still have enough money left over for heat and food.
But I keep hearing the talking heads on TV saying that for someone living in a big city like L.A. or New York, $250,000 isn’t really all that much. Oh really?
I once lived in New York City and survived (though not very well) on a waiter's pay plus tips, living in a weekly rental apartment on West 42nd Street before Times Square was renovated. I later moved to Queens with a co-worker to rent a house for a lot cheaper (in middle-class neighborhood across the street from a school).
I also lived in a ritzy area of Philadelphia (Rittenhouse Square), and on a waiter's pay I managed to live in a very nice high-rise apartment called the Rittenhouse Claridge. I didn't starve.
$250,000 is 5 times the national average "household income”, when two people in a household usually work -- which squares with the Social Security Administration, which says 50% off all U.S. workers earn $26,966 a year or less --- and the Census Bureau that says 80% of all households have at least two income earners.
Obama wants households earning over $250,000 to pay a little more (the old tax rate under Bill Clinton); but everyone earning more than that (especially multi-millionaires) are kicking and screaming like they have it so damn bad.
"Ah-ha!" I can hear Bill O'Reilly saying, because in my little scenario I'm not figuring in to account federal, state, city, and FICA taxes into that $250,000 that someone is earning.
Well, in that case, instead of buying a $1.7 million house in Los Altos California, maybe if you earned $250,000 BEFORE taxes, you could afford one of these "slum" 2 & 3 bedroom condos in New York City for half the price --- or far much less.
FOR SALE: $898,000 - South End Ave & West St. - $5,756 a month with no money down at 5%.
FOR SALE: $799,000 - 250 Manhattan Ave - $5,121 a month with no money down at 5%.
FOR SALE: $755,000 - 375 East 68th Street - $4,839 a month with no money down at 5%.
FOR SALE: $350,000 Wadsworth & West 181st - $2,243 a month with no money down at 5%.
What? You can't afford to buy and can only rent? With $250,000 a year you can easily get one of these slummy crash pads...